1. Strict control of fund management
In contract trading, fund management is the lifeline. Faced with leverage of 0-100 times, the risk of running out of funds in a short period of time is extremely high. Therefore, risk control of a single transaction is crucial. It is generally recommended not to exceed 2%-3% of the total funds, and for more aggressive investors, it should not exceed 5%-8%. Once the risk exceeds 8%-10%, the fund drawdown under unfavorable market conditions may be as high as 70%. For most investors, the psychological tolerance limit is about 50%. Therefore, strict implementation of fund management strategies is indispensable.
Many investors prefer to use 5x or 10x leverage for trading, and the operation level is often set at 4-hour charts and above. However, the stop loss range under this operation mode is usually wide, which may reach 5%-15%, causing the risk of a single transaction to easily exceed 25%, which is tantamount to seeking death. In order to control risks while pursuing high leverage effects, the operation level must be refined to 1 hour, 15 minutes or 5 minutes.
It is worth noting that as the operation level decreases, the number of investors who can successfully master it becomes increasingly scarce. Generally speaking, the 1-hour to 4-hour level is the limit for ordinary investors, while the 5-minute to 15-minute level is the domain of professional players. As for the 1-minute level, even professional players find it difficult to handle it easily.
2. Improvement and iteration of trading system
The perfection and maturity of the trading system is the foundation for investors to gain a foothold in the contract market. This requires long-term trading practice and experience accumulation until the system can clearly define trading conditions and avoid out-of-mode operations. In this process, investors need to continuously iterate the system and withstand the test of bull-bear conversion and market fluctuations. Since contract trading uses leverage, t+0 and high-frequency trading models, investors need to be prepared to pay high tuition fees, which are usually equivalent to 90% of the total funds multiplied by 9 attempts.
Therefore, it is recommended that investors start with a small amount of money, a few hundred or a few thousand yuan, and withdraw the money in time after making a profit and continue to operate with a small amount of money. In the initial stage, the system and operation are inevitably unfamiliar, and errors and redundant actions are inevitable. It is important to realize that these losses are the price of growth rather than meaningless losses.
3. Test of execution
In contract trading, execution is the key to success. A wrong bet can lead to the failure of all previous efforts, as shown in the 519 incident last year. Therefore, strict stop loss is a basic requirement, and avoiding bottom-fishing against the trend and not betting on low-probability events are important principles for protecting funds. The recent Luna incident once again reminds us that the risk of bottom-fishing against the trend is extremely high.
4. Accumulation of time and experience
A complete bull-bear cycle is a valuable opportunity for investors to accumulate experience and become familiar with market characteristics. In this process, investors should learn to adjust their strategies according to market changes to cope with the market conditions of different varieties at different stages.
5. Suggestions for small investors
For small investors with limited funds and tight time, contract trading is undoubtedly a very challenging investment method. Therefore, we make the following suggestions: first, use small funds for trial and error; second, control the leverage below 2/3 times and pay attention to fund planning; third, choose a large cycle of 1 hour, 4 hours or daily level for operation; fourth, avoid short-term contract trading or make it a career when conditions are insufficient; finally, do not invest more than 20,000 yuan in contract trading before the above conditions are met.
In short, contract trading is more cruel than arbitrage and spot trading. Investors should look at the successful cases in the market rationally to avoid being misled. Light positions, following the trend, and stop loss are important principles to protect wallets and avoid falling into the quagmire of gambling-style trading. Please think twice before choosing contract trading and act according to your actual situation. #美联储何时降息？
